Investor shift.SBI MF assets grow faster than bank deposits, crossing ₹10 lakh crore

Thanks to the booming equity markets and growing investment culture, the assets under management of SBI Mutual Fund are growing faster than the domestic fixed deposits of its parent, State Bank of India.

Thanks to the booming equity markets and growing investment culture, the assets under management of SBI Mutual Fund are growing faster than the domestic fixed deposits of its parent, State Bank of India.

The AUM of SBI MF was up 27 per cent in the financial year ending March to ₹9.14 lakh crore against ₹7.17 lakh crore in the same period last year, as per the Association of Mutual Funds in India data.

In comparison, the domestic deposit of the country’s largest bank SBI increased 11 per cent in the same period to ₹47.24 lakh crore against ₹42.53 lakh crore logged in the previous year, as per the bank data.

Read: The mutual fund SIP test: Best investment choices in each category  Similarly, SBI MF asset rose 11 per cent in FY’23 while the domestic deposit mopped up by its parent was up 8 per cent.

Riding high on buoyant equity markets and record mop-up through new fund offers, SBI MF crossed ₹10 lakh crore of average AUM on June 3.

Palka Arora Chopra, Director of Master Capital Services said MFs are narrowing the gap with traditional bank deposits as investors demonstrate a growing willingness to assume a small risk in favour of potentially higher returns.

Read: Mutual Fund versus PMS investments: Who’s scoring on returns? As investors become more financially literate and seek avenues for enhanced returns, MFs are seen as an attractive alternative to traditional bank deposits, he said.

Rajiv Anand, Deputy Managing Director, Axis Bank, at a recent IMC Chamber of Commerce and Industry Banking summit said that retail investors can invest as little as ₹250 in a MF scheme and the cost of entry is zero, thereby enabling financial inclusion.

Currently, SBI offers a maximum interest rate of 7 per cent on domestic retail term deposits of two to three years. In sharp contrast, SBI Magnum Gilt fund has delivered an 8.45 per cent return over two years, and the SBI Flexi Cap has given 20 per cent in the same period.

Read:3 more mistakes to avoid when investing in mutual funds Akshat Garg, Senior Manager at Choice Wealth said the comparison between SBI MF and SBI fixed deposits in terms of AUM serves as a classic example and a benchmark for understanding  emerging investment trends.

Given the enthusiasm of Gen Z for financial markets, it is only a matter of time before MFs surpass bank FDs in popularity and AUM, he added.

Anil Rego, founder of Right Horizon PMS, said that when the RBI significantly lowered interest rates during the pandemic, deposit rates also dropped, and people started gaining a better experience with MF investment even though bank deposits remain safe and offer conservative but assured returns.

Read: Lenders offer lucrative rates on FDs amid rising competition, new tax norms Investors are increasingly shifting from FDs to MFs due to several unique factors, including regular small investment through SIPs, goal-based investment, and enhanced digital platforms, which make investing in MFs more convenient than traditional FDs, he added

Like (0)
Previous June 18, 2024 9:43 am
Next June 18, 2024 9:43 am

Related posts

  • The three major U.S. stock indexes continue to reach new highs, with the Dow exceeding 40,000 points for the first time

    U.S. stocks edged higher on Thursday, with the Dow Jones Industrial Average crossing the 40,000 mark for the first time

    US stock news May 16, 2024
  • BHP Billiton bids £31.1 billion to acquire Anglo American

    Australian mining giant BHP Group confirmed on Thursday that it had made an all-stock takeover proposal to Anglo American PLC, valuing the smaller rival at 31.1 billion pounds (about 38.8 billion U.S. dollars). Anglo American investors will receive 0.7097 BHP shares for each share they hold, as well as shares in Anglo American Platinum and Kumba Iron Ore. As of Wednesday\’s close, Anglo American\’s market value was 27 billion pounds. BHP Billiton said in a statement: \”This merger will combine the strengths of BHP Billiton and Anglo American in an optimal structure. Anglo American will bring its assets and long-term growth potential. BHP will bring higher-margin cash-generating assets and growth projects, as well as greater free cash flow and a stronger balance sheet. ” Anglo American said late on Wednesday that it had received an unsolicited all-stock merger proposal from BHP Billiton and that the board of directors was conducting an evaluation. BHP\’s proposal comes with a condition that Anglo American divest its platinum and iron ore operations in South Africa first, the company added. If the acquisition goes ahead,…

    US stock news April 25, 2024
  • Yili Clean Energy\’s performance forecast \”changed\”, with a difference of hundreds of millions of yuan between the previous and later disclosures! The company and its executives were issued warning letters

    Log in to the Sina Finance APP and search [Xinpi] to view more evaluation grades. For stock trading, look at Jin Qilin analyst research reports, which are authoritative, professional, timely and comprehensive to help you tap potential theme opportunities! On April 25, the Inner Mongolia Securities Regulatory Bureau disclosed an announcement on the decision to issue warning letters to Yili Clean Energy Co., Ltd. and relevant responsible personnel. According to the announcement, Yili Clean Energy Co., Ltd. (hereinafter referred to as Yili Clean Energy), Chairman Wang Ruifeng, General Manager Hou Jinghui, and Financial Director Zhang Yanmei were subject to administrative supervision measures such as issuing warning letters due to inaccurate performance disclosures, and were recorded in securities and futures records. Market Integrity Profile Database. After investigation, when Yili Clean Energy disclosed its 2023 performance forecast on January 31, the estimated net profit was between 36.45 million yuan and 52.86 million yuan, and after deducting non-net profits, it was -112.42 million yuan to -96.01 million yuan. On April 23, the company disclosed a correction to its performance forecast because the company…

    US stock news April 25, 2024
  • Released the first \”Low Carbon Medical Action Guidelines\”, Yingkang Life Insurance further promotes low carbon operations

    Recently, the \”Seventh Hospital Logistics Development Conference and Hospital Logistics Equipment, Technology and Service Exhibition\”, guided by the Hospital Construction and Equipment Branch of the China Medical Equipment Association and sponsored by Zhuyi Tai, was officially held. The conference aims to improve the sophistication of the overall hospital operations. and informatization to help build smart hospitals, safe hospitals, and green hospitals. At the scene, Yingkang Life, a listed company under Haier Group\’s big health ecological brand Yingkang Life, released the \”Low Carbon Medical Action Guidelines\”. According to industry experts, this is the first action guideline for the mainland medical industry to integrate low-carbon and medical care. Hospitals are an important area of ​​medical carbon footprint and an important scenario for achieving medical carbon peak and carbon neutrality. According to \”HEALTH CARE`S CLIMATE FOOTPRINT\” released by Harmless Medical, the carbon footprint of the medical sector in various countries around the world accounts for an average proportion of national carbon emissions of 4.4%. The top ten medical system emitters account for 75% of the total global health care emissions. China ranks second…

    US stock news April 25, 2024
  • Tasly: ​​Net profit attributable to parent company in the first quarter was 295 million yuan, a year-on-year increase of 11.58%

    In the context of national policies that are favorable to traditional Chinese medicine, Tasly, a leading modern traditional Chinese medicine company, has seized development opportunities and has a good start in 2024. On the evening of April 25, the 2024 first quarter report released by Tasly (600535) showed that during the reporting period, the company achieved operating income of 2.049 billion yuan; net profit attributable to the parent company was 295 million yuan, a year-on-year increase of 11.58%, and the operating quality remained good. Tasly, which has firmly established its leading position in the research and development of traditional Chinese medicines, currently has as many as 9 innovative traditional Chinese medicines in Phase III clinical trials, which indicates that the company will gradually launch new products on the market in the next few years and continue to expand the company\’s business growth space.

    US stock news April 25, 2024
  • From exporting products to overseas production to exporting production capacity, Jilian Technology’s first overseas production base officially opened

    Shanghai Securities News China Securities Network News On April 25, the inauguration and opening ceremony of UFJ Technology’s first overseas production base, the Malaysian factory RAY TECH (Malaysia) SDN. BHD., was held in Johor, Malaysia. This also marks the official launch of UFJ Technology’s first overseas production base.

    US stock news April 25, 2024